541352.BO WACC - Weighted Average Cost of Capital

The WACC of Megastar Foods Ltd (541352.BO) is 9.7%.

The Cost of Equity of Megastar Foods Ltd (541352.BO) is 12.20%.

The Cost of Debt of Megastar Foods Ltd (541352.BO) is 6.20%.

	Range	Selected
Cost of equity	10.10% - 14.30%	12.20%
Tax rate	24.40% - 28.40%	26.40%
Cost of debt	4.00% - 8.40%	6.20%
WACC	7.8% - 11.6%	9.7%

WACC

541352.BO WACC calculation

Category	Low	High

Long-term bond rate	7.5%	8.0%
Equity market risk premium	6.9%	7.9%
Adjusted beta	0.37	0.73

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.10%	14.30%

Tax rate	24.40%	28.40%
Debt/Equity ratio	0.49	0.49
Cost of debt	4.00%	8.40%

After-tax WACC	7.8%	11.6%


Selected WACC	9.7%

541352.BO's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for 541352.BO:

cost_of_equity (12.20%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (0.37) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.